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HK government releases relief measures to support local businesses
The Hong Kong government has released the details of a subsidy scheme to help locals and businesses in the midst of the Covid-19 pandemic.
The growing impact of Covid-19 on the world economy is catastrophic. Like many other countries in the world, an array of industries in Hong Kong were hugely affected by the drop in footfall.
In early April, the Chief Executive of Hong Kong announced a HK$120.5 billion second-round anti-epidemic fund to provide relief for hard-hit sectors, including the catering industry which is currently complying with the new regulations for social distancing. The details of the scheme are as below:
The government will provide wage subsidies for eligible employers who do not make workers redundant during the subsidy period, and will spend 100% of the subsidy on paying wages for their employees.
All employers who have been making Mandatory Provident Fund (MPF) contributions or have set up Occupation Retirement Schemes for employees are eligible. Wage subsidies for each employer are calculated at 50% of a salary in a “specified month” (capped at a salary of $18,000) for six months. Employers may choose any one month from January to March 2020 taking into account their own circumstances.
Specifically for the catering sector, business owners can apply for a subsidy ranging from $250,000 to $2.2 million, depending on the area, for licensed catering outlets selling or supplying food for consumption on their premises. To support employment, catering outlets receiving the subsidy are required not to implement redundancy during the subsidy period, and pay no less than 80% of the subsidy for the respective months on staff salaries. It is expected that around 16,000 licensed catering outlets and their employees will benefit, accounting for around $9.5 billion.
Application details are yet to be announced at this point. According to an industry insider, the registration of the subsidy shall begin in early May and business owners can only choose to apply for either one of the schemes. In any case, the subsidy will be disbursed to employers in two tranches, with the first before the end of June 2020.